SUBJECTS: ACCC Digital Platforms Inquiry; Press Freedoms; Liberals’ union attacks; John Setka.
DAVID SPEERS: Joining me this morning is the Shadow Minister for Communications, Michelle Rowland. Very good morning to you. Thanks for joining us this morning, Michelle Rowland. Look, let's look at the ACCC's report. They're trying to tackle a few different things here with this report. Let's begin with one of them. This is the impact on the advertising market, and therefore journalism as well. As you would know, for every one hundred dollars that’s spent on online advertising in Australia, $47 is going to Google, $24 is going to Facebook, right? So they are gobbling up a lot of this online advertising revenue and that is draining a lot of the life blood out of media companies that goes into journalism. The ACCC's recommending some sort of revenue sharing model here. Do you think that's a good idea and is it workable?
MICHELLE ROWLAND MP, SHADOW MINISTER FOR COMMUNICATIONS: I think this has merit for a couple of reasons, David. The first, as you rightly go to, issue for what we call old or legacy media, so that's media in the traditional broadcasting space you could say, that has been built on the back of being able to monetise what they do, and clearly if you're not able to monetise sufficiently to promote things like public interest journalism and the basic content that you need in order to conduct your affairs that's a huge issue. And it's not like this has happened overnight. This has been happening over some decades now, but has really come to the fore with a focus on ad tech and a focus on these models and how revenue is shared from that advertising. The point that goes to that, David, is the ability, or in many cases as we see from this report, the inability of the publishers to be able to negotiate terms which they consider to be fair and which the ACCC considers to be fair, as again they've said in this report.
So it also goes to the issue of producers, those who produce content being adequately compensated for that content. And as you point out in those few examples this is a very wide-ranging report. It goes even to issues such as copyright. So I think that this is, by its nature, one that is going to draw the attention of those online platforms. But as you say, these are multi-billion dollar companies.
SPEERS: It's a difficult one. As you say, they are huge companies and we'll come back to that. But this one about how you properly compensate a media company for its content being used on Google or Facebook, it is one, as you say, media companies have been grappling with for years and they've tried various paywalls and other models to do this. I just wonder, do the tech giants have them over a barrel here? Can they simply say 'fine, if you don't want to be on our platform, don't be on our platform'. I mean, the media companies can't afford not to be on these platforms can they?
ROWLAND: I think you're absolutely right, and I think the days of old media being characterised as the dummies and the platforms being characterised as the only people around who are innovating, I think those days are long gone, by the way. We have quite an ecosystem now where there is reliance on one another, but the key issue that the ACCC brings out here is the transparency and fairness of those arrangements. And the transparency, as they have concluded, is lacking in the ad tech space, that opaque nature of how auctions are done for those eyeballs that actually produce revenue for the search engines or for the social media platforms. So we need to recognise, and I think the ACCC does do this, that it is an ecosystem but it's about transparency and fairness and that level playing field that the broadcasters have been calling for.
SPEERS: But if these tech companies say we think it's fair deal at the moment, is there a role for government to come in and force some sort of revenue sharing with media companies?
ROWLAND: I think there's a role for government, as to what that appropriate model is – look, the ACCC puts forward its own recommendations, but I think we also need to recognise that when you have those new bodies and those new mechanisms that are being proposed, they need to be funded. And as Rod Sims pointed out, this is the start. This is not the end of the inquiry. Many of his recommendations are about a starting point. So if we don't try we'll never know, but I think what has clearly come out in this report is that there is a role for government because the commercial entities aren't going to take action on their own volition.
SPEERS: Fake news is another thing the ACCC is trying to tackle here. It's suggesting that ACMA or some other independent regulator actually monitor the trustworthiness and reliability of news content. Again, how workable is that? Would you have faith in a government or quasi-government body actually deciding what's fake news and what's real news?
ROWLAND: I think this is going to be one of those recommendations, David, that gets more attention over time, even though it hasn't been so much of a headline in the last couple of days. There are arguments for this role, in that again news and news gathering and news dissemination is an important part of a functioning democracy. And therefore there is a role for government to ensure that that occurs. On the other side, the platforms would argue 'well, we already have people who are doing this and consumers have a right to access whatever information they like.' So it really is a balancing exercise here and I think this recommendation has a lot to play. And again this will depend...
SPEERS: Where would you come down on the idea of some government body actually getting in there and saying this is fake news?
ROWLAND: I think we need to, whilst instinctively we would be anti-fake news, I think that you would need to exercise caution in how that is done. You don't want anyone coming along, a regulator for example, who is censoring what actually goes out to people, because the whole idea of the internet, as we know, is that there's a freedom of information and democratisation on that platform. So you would want to exercise ...
SPEERS: But to do trust Facebook and Google to do this themselves?
ROWLAND: The ACCC clearly does not in many aspects. And again, I think you would need to question whether Australian consumers at large would trust them to do that, particularly considering the privacy breaches.
SPEERS: Do you?
ROWLAND: Personally, I don't but that is my personal view. I think that again the very fact that these organisations are there to make a profit, the profit motivation is the primary driver. That is not to say that; they are very conscious of their public relations side there. But again, as you point out, even the fines that they've received and the bad publicity for those privacy breaches in the US, multi-billion dollar fine there, that's barely a blip on their revenues.
SPEERS: Well yes, this gets to the recommendations from the ACCC around privacy, you know, essentially tougher penalties, but are any tougher penalties Australia can impose really going to matter at all to these tech giants? I mean that $7 billion fine during the week in the US, it's a road bump for them.
ROWLAND: Well, we could throw up our hands and say well, nothing is going to be enough and the facts won't change. The facts won't change that these platforms make a lot of money. The facts won't change that, even though as I said, I don't know that they can be trusted to do this work on their own, I'm still going to use them, as are so many Australian consumers. But I think the key point here goes to the need for international cooperation. And it was pleasing to see in Rod Sims' comments that the process they are undertaking was about engaging with international regulators as well.
SPEERS: Just looking at where the ACCC didn't go. It didn't recommend new powers to break up these tech giants. Is that something that you would have liked to have seen, given these concerns around privacy, around the impact on, it's not just the media market, but so many industries. The other concerns that we've talked about. Would you like to see much stronger laws in place that could force them to be broken up?
ROWLAND: Look I'm on the record as having a view on this, David, that goes to the principles of competition law. I mean, to start the whole point is that you should have proportionate regulation. You should regulate to the extent necessary in order to remedy breaches of market power, and divestiture is at one very extreme end. And I think we need to be aware that the laws around this in Australia, and as opposed to anti-trust in the US for example, are two very different things.
But I think Rob Sims did summarise it nicely on Friday when he said if we get into that area of divestment the whole focus goes towards breaking up, and it could actually be counterproductive if you have another entity springing up elsewhere that can't be regulated under those divestiture powers. So his focus was on what can be done now, what recommendations can be done now to benefit Australian consumers. I do think that that is the right and proportionate approach, and I do think that we need to recognise that antitrust law and divestiture in Australia is quite different from what it is in many other countries.
SPEERS: All right, so no need for a big stick divestment power on the tech giants from your perspective?
ROWLAND: But the point is, David, we need to see where this goes.
SPEERS: Yeah, no indeed.
ROWLAND: You need to see how those laws operate.
SPEERS: And on tax, look you touched on international cooperation and I know there is international progress towards a better tax regime for the tech giants. You would have seen though, France is imposing a three percent tax on the revenue of Google, Facebook, Amazon, Apple. It's drawn the ire of Donald Trump. I think we've got his tweet here from yesterday as well on this, saying that we're going to announce substantial reciprocal action on the Emmanuel Macron's foolishness shortly. He's talking about American wine better than French wines. So, he's talking about some sort of retaliation here. What do you think though? Should Australia consider this French model of a specific tax on the revenue of these tech giants?
ROWLAND: Look it's complex. And I think that the ACCC has shown us a lot in this report and it didn't delve into these specific issues, but I would make two points. The first is I don't think you'll find an Australian who is against the idea of everyone paying their fair share of tax, and the notion that we have...
SPEERS: And are these right now? Are these companies paying their fair share?
ROWLAND: There's an argument that that is not the case. They would argue that they are, and they would produce evidence to the contrary and statistics.
SPEERS: But again, what do you think?
ROWLAND: Look, I think that it is an open question about whether or not they're paying their fair share. I don't have evidence before me that says that one way or another, but I think it's very clear again, as you point out from the start, these are enormous multinational companies who are making substantial profits from Australian consumers. I think it's right to expect that their contribution to Australia should be commensurate and should reflect the value that they're getting from Australian consumers. Particularly, as you say, data is a commodity here and consumers have a right to be concerned about how their data is making everyone else wealthy except themselves.
SPEERS: Let me ask you on press freedom, Michelle Rowland; the Senate during the week voted to set up a Senate Inquiry into the issues of press freedom. This on top of the inquiry that's already been set up and will commence from the Parliamentary Joint Standing Committee on Intelligence and Security. Why do we need two inquiries?
ROWLAND: I think Labor from the start has always argued that the PJCIS would be the wrong forum for this. Clearly, we didn't have the numbers to prevent that happening and the Government pushed on with that. And even Anthony Byrne, very respected Deputy Chair of the PJCIS, thought that that was the wrong forum for it, that the focus would be on securitisation issues. What we need to have is the Parliament giving recognition that these are important issues that go to our democracy. So I believe they are going to be looking at two different aspects in that regard. I do think it's important that we examine the ways in which these powers are being used. There are many unanswered questions still around those police raids, and raids that did not happen where there were leaks of confidential information.
SPEERS: All of these things seem to come down to a question of how you balance, and the media has to do this and does this pretty well I would argue, bringing to attention matters of public importance while also protecting matters that are genuinely national security matters. Is there a need to put down in law, put down in writing, what is and isn't required to be protected. If it's putting lives at risk, don't report it. If it's simply embarrassing to the government, go for your life. Does that need to be legislated?
ROWLAND: Look I take your point that that sounds like one way to have it very clearly set out, what is and is not covered. But I think even for that, David, you're going to have instances where it's not clear. Even though you might think that those guidelines are clear, they are not. There are guidelines for the AFP, for example, in when raids are conducted. And again, I think that the inquiry that is on foot should go to whether or not those guidelines were followed, and indeed if they weren't then why not. But I think once we start getting into these areas of setting out very much in black and white what is and is not, I think you're going to have, inevitably, cases where that is unclear and where that becomes a problem for publishers and for journalists themselves seeking to do their jobs.
SPEERS: Let me finally just ask you, this week in Parliament, Scott Morrison is bringing on the union-busting bill for debate. Labor's opposed to it. Is the fact John Setka remains the CFMEU leader in Victoria a problem here for Labor? Doesn't it demonstrate why these sort of laws are needed?
ROWLAND: Well, let's be very clear. If the Government is purporting that this law would be retrospective, and get rid of this individual then I would argue that that's not the case and that's not what the law would do.
SPEERS: No it's not.
ROWLAND: But I've made my view very clear...
SPEERS: But this sort of example.
ROWLAND: Well, I've made my view very clear on the issue of John Setka, David. I don't think he belongs in the Labor Party and I don't think he belongs in the union movement. I can have my view on one ...
SPEERS: But he's staying. He's staying and the union members seem happy for him to stay. So would this law be a good idea?
ROWLAND: Well, I actually would contend that there are many people who are not happy that he would be staying, but let's be clear about what this law is. This law reflects the Liberals hatred of unions more than anything else.
SPEERS: All right, Michelle Rowland, we'll have to leave it there. Thanks very much for joining us this morning. Appreciate that.